IMF: Azerbaijan's economic growth to stabilize at around 2.5% in medium term

This year, Azerbaijan's GDP is expected to grow by 2.1%, reflecting continued weakness in oil and gas production alongside slightly faster growth in the non‑oil sector. In the medium term, growth rates are projected to stabilize at around 2.5%, Anna Bordon, Head of the International Monetary Fund (IMF) mission to Azerbaijan, following her visit to Baku from February 4–17, 2026, Report informs.

The IMF forecasts that in 2027-2031, Azerbaijan's economy will expand by an average of 2.5% annually. GDP in the oil and gas sector is projected to decline by 2% in 2026, and then by 0.5% per year until 2032. Meanwhile, GDP in the non‑oil sector is expected to grow by 3.7% in 2026, 3.6% in 2027, and an average of 3.5% annually from 2028 through 2032.

"In 2025, growth weakened while inflation accelerated. Hydrocarbon output fell significantly, and momentum in the non‑oil sector slowed due to the indirect impact of lower oil and gas prices and the normalization of investment volumes after previously high levels. Overall, real GDP growth slowed to 1.4% in 2025, compared to 4.2% in 2024," Bordon noted.

She emphasized that Azerbaijan is prioritizing economic diversification:

"Expanding the role of the private sector, including attracting foreign direct investment, requires deepening capital markets to improve business access to finance, boosting labor productivity through investment in human capital, and continuing reforms to reduce informal employment. Alongside progress in monitoring state‑owned enterprises, reducing the share of regulated prices and cutting budget subsidies would strengthen competition and improve efficiency."

The IMF mission's visit aimed to review Azerbaijan's economic situation, including financial sector developments, economic outlook, risks, and policy measures to promote sustainable growth.